Oil Price Plunge Will Weaken Critical Industry Projects – NNPC

The group managing director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Joseph Dawha, has said that the ongoing decline in crude oil prices would weaken operations in Nigeria’s oil and gas sector and particularly cause interruption in about three deep-water  projects in the country.

Dawha, who expressed the apprehension at the Offshore West African Conference in Lagos, with the theme, ‘Managing West African’s Major Projects’, said that this year’s theme was carefully chosen to address the decline in oil projects affecting West African countries and ways to proffer better solution.

Dawha, who was represented by the group general manager, National Petroleum Investment Management Services (NAPIMS), Mr Jonathan Okehs, stated that many companies had serious cash flow challenges due oil price decline, which has reduced their capital expenditure.

He further noted that many healthy companies’ balance sheet would result in delay of economic viable projects and such scenario would become a feature of many companies’ projects and programmes, especially offshore projects.

Dawha said that a number of deep-water projects will suffer delays or outright cancelation including one in Angola, three in Nigeria and one in Ghana.

According to him, in Nigeria the challenge for industry is how to manage major projects through both price and physical uncertainty.

“As in the past, in 1986, 1998 and 2008, Nigeria has always responded in many projects and right balance of incentive, as this industry is important in the overall industry of our country,” Dawha added.

On his part, the executive secretary, Nigerian Content Development and Monitoring Board, Mr Ernest Nwapa, urged operators to keep the Nigerian Content alive.

He urged operators not to panic over the decline in oil price.

“I don’t think we should panic, but to pay more attention about what to do to record the benefit that our business will bring to its operation,”Nwapa said.

Offshore West Africa 2015 Advisory Board chairman, Mr George Oguachuba, said that the oil and gas landscape in Africa was changing rapidly as demonstrated by the many emerging oil and gas nations.

Source: Leadership